Large FiberNet capital equipment expenditure OK’d by city council

Monticello City Council members unanimously approved a $210,000 capital expenditure Monday night for FiberNet, the city’s telecommunications and broadband provider.
General Manager Mark Pultusker presented the equipment request at the end of the council’s regular meeting.
City Administrator Jeff O’Neill added the agenda item earlier in the meeting.
“We need to invest some money into FiberNet,” Pultusker said, pointing out he made city leaders aware months ago that improved equipment was needed.
System testing equipment, additional staff training and adding equipment to place local advertising into programs made up the most of the capital request.
For example, Pultusker said one of the most expensive items on his list was an ad insertion splicer, a piece of equipment that carries a $50,000 price tag.
“We have the right to insert our own commercials for one or two minutes per hour of programming,” he said.  “It doesn’t matter what the programming is. We have not done that because it requires certain equipment. We can offer something Charter and TDS can’t offer. They can’t sell commercials to Monticello.”
Pultusker said the city could place ads on FiberNet for the liquor store or Monticello DMV that will reach subscribers outside of Channel 6 or Channel 12.
“There are other examples of smaller expenditures for things that should have been done years ago,” he said. “We don’t have testing or troubleshooting equipment. That makes it very difficult to diagnose and fix problems.”
Pultusker offered this example: “We used to have a blank screen problem. It took me 10 weeks to solve a problem that could have been solved in a week. Most of this should have been purchased when the original system was designed. Training staff costs money and time.”
According to Pultusker, the funds for the FiberNet capital expenditures will coming from already collected cable franchise fees. “It’s not taxpayer dollars,” he said. “It’s fees FiberNet, Charter, and now, TDS paid to the city. There’s a 5 percent tax on cable television revenue that’s distributed. Those funds have not been allocated for anything particular, so that’s where the money is going to come from. Hopefully, the money will provide better service and reduce our deficit.”
Finance Director Wayne Oberg said Tuesday that the FiberNet capital expenditure request would be drawn from the city’s streetlight fund. That’s the financial landing location for the cable franchise fees when the revenue comes into the city’s coffers. “We put our franchise fees into one account,” he said. “Some of that fund is set aside for the acquisition of utility-related equipment. Other money is used to maintain our streetlights in town. Telephone is considered utility.”
According to Oberg, Monticello’s streetlight fund currently has a $739,000 balance.
“We take what we get from the Sherburne-Wright Cable Commission and put those franchise fees into the streetlight fund, along with others.” There’s more than just one franchise fee in the city, Oberg said, referring to Charter and TDS.
“There’s two places this money goes,” Oberg added. “There’s a section in the general fund; we use some of the franchise fee to offset general fund expenses related to our street lights, and it goes into the streetlight fund for the purposes of capital items. General fund is maintenance, capital is improvement.”
O’Neill stated in an email Tuesday the actual purchase of the FiberNet capital items approved Monday night will follow the city’s established purchasing policies.
“Now is not the time to market FiberNet,” Pultusker added.
“Once we put these equipment items in place, we’ll be in position to do a different type of marketing. We’ll be able to demonstrate things and have people come to our office.”
The second, later phase of Pultusker’s capital equipment request presented last week [$100,000] includes a technology center.

Contact Managing Editor Tim Hennagir at tim.hennagir@ecm-inc.com

  • Monticello Resident

    How does the city plan on selling commercials on Fibernet TV channels to businesses when there are not enough subscribers using the service to warrant charging for the TV spots? If the local business community is not supporting the city’s fiber business by subscribing themselves they must be questioning the ability to service in the first place. How does the city expect those same businesses to turn around and purchase ads?

    This ability to sell ads on the city’s TV channels is not something that is so unique from what TDS and Charter are doing – what is unique is that the competition understands how to provide services for Internet, TV and phone, something the city and its consultant are still working on to fix. It’s going to be a long uphill battle for the city to build a positive image for themselves now that they have failed financially not to mention the millions of dollars it could take to fix all that has gone wrong.

    • What are you thinking

      Right on. The problem from the beginning is that there are 15 people in a room and they are all telling one another this is a great idea. Now they want to market this idea to themselves. The fact that they put this on the agenda and then approved it (good money after bad) is sickening! When are we going to stand up, demand they stop stealing our money and shut this down? Highway Liquor…..Highway Robbery!!

  • Kevin Boynton

    When taxpayers vote for a new mayor and council the new people may do the right thing. In the meantime city lighting, streets and all the rest will pay out for this debacle, at least until they can’t. It can be interesting when those who spend the money don’t have to raise it.
    The comment (Feb 4) about 15 people in a room is true. With smaller advisory groups there is accountability.
    Be careful what you wish for.

  • Joe Dohn

    So how do Charter and TDS benefit by paying into this fund and Fibernet gets to spend the money?

    Plus, why would Charter or TDS want to market just to Monticello? Why not hit the market of Buffalo, Monticello, Big Lake and all of the other surrounding communities? Oh yeah, because your market IS only Monticello, Fibernet.

    Sounds like somebody has their own agenda…

  • Monticello Resident

    Kevin, your comment, “With smaller advisory groups there is accountability.” – I say only if those members have the courage to challenge and question what staff tells them. In the case of FiberNet, the advisory board has never done their duty to advise or at minimum demand information they are entitled to in order to properly fulfill their roles. As an advisory board if you are not provided the information, you need to ask for it and follow up to make sure you obtain it. In the city’s case, they always handpick members who they can manipulate and who will not ask the tough questions. Anyone who happens to get on board a city committee who decides to ask challenging questions quickly finds themselves off the board. The fiber advisory board was originally designed to help advise the operations. Instead of recruiting knowledgeable people in the industry to be on the board they handpicked community members who could be counted on to behave and not ask tough questions.

    The city gets what they deserve with a failing fiber business. As government employees, are not qualified to run a private telecommunications business with corporate competition right outside their doors. Although the fiber advisory board is smaller (five people), two of them are council members. From reading the Minutes, there has been little accountability from these meetings and the three who are not council members are to blame because they need to hold the two council members accountable as well as the manager/consultant and city administrator.

    I find it ironic that the city got themselves into trouble by relying on HBC as a consultant and they have put themselves in a similar position now with Mark Pultuskar who by the way receives $20,000 per month for his consulting fee plus $3,000 in travel expenses. I never understood why the city did not hire a competent general manager who has a competitive industry salary plus bonus based on performance. That way the manager is invested in the success of the operations. A consultant is only invested in the paycheck. I only see Round #2 of another consultant taking the city to the cleaners financially. What will guarantee this guy is any different than HBC?

  • Monticello resident 2

    Fibernet is a complete waste of money now they want to advertise other government entities like they are going to make a profit. The money all comes from the same place…. I had fibernet for 3 months but cancel after everytime I was on the internet it crashed, I went back to Charter I will gladly pay a little extra for a constant signal. Oh and Liquor stores don’t need to advertise, their product speaks for itself.

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